Tesla (TSLA) Stock: Analyst Predicts 25% Drop if Musk Leaves Company Entirely

TLDR:

Tesla’s board reportedly considering CEO replacement, which Musk and the board denied Gary Black estimates Tesla stock could drop 5-10% if Musk stays but steps down as CEO, or 20-25% if he leaves completely Tesla plans to launch its robotaxi service in Austin, Texas in June Tesla stock rose 18% since reporting Q1 earnings on April 22 Waymo recently partnered with Toyota, creating what analysts call “legit competition” for Tesla

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Tesla’s future appears to be at a crossroads with recent rumors about CEO Elon Musk’s potential replacement and the upcoming launch of its robotaxi service just weeks away.

Tesla, Inc. (TSLA)

The Wall Street Journal recently published a report claiming Tesla’s board was looking to replace Musk as CEO. This claim was quickly denied by both Musk and the board.

Musk called the report an “extremely bad breach of ethics” and a “deliberately false article” in a post on X.

It is an EXTREMELY BAD BREACH OF ETHICS that the @WSJ would publish a DELIBERATELY FALSE ARTICLE and fail to include an unequivocal denial beforehand by the Tesla board of directors! https://t.co/9xdypLGg3c

— Elon Musk (@elonmusk) May 1, 2025

Tesla’s board chair Robyn Denholm also denied the allegation.

Gary Black, managing partner at The Future Fund LLC and a longtime Tesla bull, addressed the speculation on X. He estimated that if Musk stepped down as CEO but remained in another role such as Chief Technology Officer, Tesla’s stock could drop 5% to 10%.

I’m of the opinion that if @Elonmusk gave up his CEO role at $TSLA but continued in some role as Chief Technology Officer or Chief Product Officer, TSLA stock would fall by 5-10%. If Elon left TSLA altogether I believe TSLA stock would fall by 20-25%. For that reason I think… pic.twitter.com/ZwJ62gEXSB

— Gary Black (@garyblack00) May 1, 2025

More concerning was Black’s prediction that a complete departure by Musk could trigger a 20% to 25% decline. This would wipe out nearly $220 billion in shareholder value.

Black’s comments highlight how much Musk still anchors Tesla’s $880 billion market cap. This is a key reason why he believes the “odds are low” that the board would replace him.

Robotaxi Service Coming Soon

While leadership rumors swirl, Tesla is preparing for a major milestone. The company plans to launch its self-driving robotaxi service in Austin, Texas, in June.

This launch date is part of what has driven Tesla’s stock up 18% since reporting first-quarter earnings on April 22.

The robotaxi service has been long awaited by investors. Musk has famously predicted that truly self-driving cars were “a year away” for nearly a decade. Now, the June launch is just weeks away.

Musk has consistently chosen to use advanced cameras and artificial intelligence rather than expensive sensors for Tesla’s self-driving technology.

Competition Heats Up

Tesla’s main robotaxi competitor, Waymo, currently completes more than 250,000 driverless rides weekly. While Waymo uses more sensors than Tesla, artificial intelligence is the core of its technology too.

In a recent development, Waymo announced a partnership with Toyota to develop self-driving technology for personal vehicles and commercial applications.

Morgan Stanley analyst Adam Jonas called this partnership a “major milestone” and “legit competition” for Tesla.

The rise of AI has increased the need for real-world data to train driving models. Both Waymo and Tesla have the AI computing power and real-world driving data needed, though Tesla likely has more data with some 6 million vehicles on the road that can help train its AI models.

Jonas suggested that Toyota and Waymo are essentially trying to recreate Tesla’s advantages. He also noted the possibility of other automakers partnering with Waymo or potentially aligning with Tesla in the future.

“We’ve been waiting for several years for Tesla to explore self-driving licensing opportunities with other OEMs,” Jonas added.

Tesla shares ended Thursday down by 0.58%, and fell another 1.06% after hours, partly due to the leadership uncertainty.

Jonas maintains a Buy rating on Tesla stock with a price target of $410, believing AI applications represent most of the value in the stock. Currently, 53% of analysts covering Tesla rate the shares as Buy.

Tesla’s stock was up 0.3% in premarket trading on Friday at $281.28.

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